The relation between municipal and government bond yields in an era of unconventional monetary policy

In this paper, we investigate how the 5‐year Swedish municipal bond yield has been related to the corresponding yield on government bonds during the period that the Riksbank has conducted unconventional monetary policy in terms of bond purchases. Using daily Swedish data on bond yields from February 2015 to January 2018, we first conduct an event study to assess the short‐run effects of the Riksbank's bond‐purchase announcements. We then estimate bivariate vector autoregressive models to study the dynamic relationship between the yields. Results from the event study suggest that the accumulated short‐run effect of the Riksbank's announcements was to lower the government bond yield by approximately 40 to 50 basis points and municipal bond yields by 30 to 35 basis points. Our vector autoregressive analysis indicates—in line with the event study—that an unexpected decrease in the government bond yield initially increases the municipal bond‐yield spread. However, after approximately 4 weeks, the effect has been reversed and the municipal bond‐yield spread is lower than it was initially. By conducting this analysis, we contribute to the understanding of the transmission of unconventional monetary policy.     

Do foreign exchange forecasters apply asymmetric loss functions? Evidence from three major exchange rates

This article investigates which type of loss function is consistent with the hypothesis that major exchange rate forecasts, i.e. the euro, the British pound, and the Japanese yen vis-à-vis the US dollar, are rational. We apply a comprehensive data set, which also allows us to examine different forecast horizons and heterogeneity of forecasters.     

Crafting customer insight: What we can learn from the revival of the vinyl record

The recent resurgence of the vinyl record and the proliferation of so-called craft and artisanal products offer unique opportunities to observe ongoing shifts in the contemporary consumer’s values and attitudes. In this article, we explore such thought-provoking market developments and their implications by contrasting them with the conventional understanding of markets and consumers. This understanding can lead to marketing myopia as it works from the utility-oriented assumption that what ultimately matters for both the company and the customer is cost efficiency and convenience. Against this backdrop, in this article, we discuss how market developments representing the contemporary consumer’s mindset prove valuable in creating customer insight that highlights aspects often obscured by an exaggerated focus on cost efficiency and convenience. We provide an alternative approach to evaluating markets and consumers that encourages companies to build their customer-centric market strategies around questions of context, authenticity, story, and resonance. This will help them narrow the gap between their market offerings and the actual wants and needs of their customer, and consequently allow them to revitalize their market.     

Determinants of idea sharing in crowdsourcing: evidence from the automotive industry

Drawing on external ideas through crowdsourcing has become common practice for firms that seek to improve and extend their product portfolios. As these initiatives often address the users of products, it is essential for firms to recognize those attributes that determine these individuals' willingness to share their ideas. This study takes the example of the automotive industry to examine how three attributes of car drivers determine their sharing behavior – that is, altruism, psychological ownership of ideas, and trust in car manufacturers. Our findings suggest that trust and altruism strengthen idea sharing, while psychological ownership weakens it. Furthermore, we find that car drivers' perception of sharing‐related risk acts as an important boundary condition for these relationships.     

What has New Zealand gained from The FTA with China?: Two counterfactual analyses†

We investigate the effects of the 2008 New Zealand (NZ)–China free trade agreement (FTA) on exports from NZ to China, and real GDP per capita in NZ using the synthetic control method to estimate the counterfactuals. NZ exports to China were more than 200% higher in 2014 than what they would have had the FTA never been signed. NZ's food and live animals exports to China were more than 180% higher in 2014 than the counterfactual. Our counterfactuals indicate a small but negative effect of the FTA on NZ's real GDP per capita between 2009 and 2012.     

Bayesian Inference in Spatial Sample Selection Models

In this study, we consider Bayesian methods for the estimation of a sample selection model with spatially correlated disturbance terms. We design a set of Markov chain Monte Carlo algorithms based on the method of data augmentation. The natural parameterization for the covariance structure of our model involves an unidentified parameter that complicates posterior analysis. The unidentified parameter – the variance of the disturbance term in the selection equation – is handled in different ways in these algorithms to achieve identification for other parameters. The Bayesian estimator based on these algorithms can account for the selection bias and the full covariance structure implied by the spatial correlation. We illustrate the implementation of these algorithms through a simulation study and an empirical application.     

Good global citizen? ASEAN’s image building in the United Nations

ABSTRACT

Based on role theory, the article examines the images that ASEAN member governments project of their organization. It rests on a discourse analysis of 198 speeches in the United Nations General Assembly between 1998 and 2017. Findings suggest that ASEAN does not figure as a top priority for delegates and that an overarching ASEAN role conception is missing. However, their addresses reveal parameters on which a collective role conception can be built. Individual ASEAN countries undertake great efforts to project themselves as ‘good global citizens,’ a role conception that could also be applied to ASEAN.     

Forecast-error-based estimation of forecast uncertainty when the horizon is increased

Past forecast errors are employed frequently in the estimation of the unconditional forecast uncertainty, and several institutions have increased their forecast horizons in recent times. This work addresses the question of how forecast-error-based estimation can be performed if there are very few errors available for the new forecast horizons. It extends the results of Knüppel (2014) in order to relax the condition on the data structure that is required for the SUR estimator to be independent of unknown quantities. It turns out that the SUR estimator of the forecast uncertainty, which estimates the forecast uncertainty for all horizons jointly, tends to deliver large efficiency gains relative to the OLS estimator (i.e., the sample mean of the squared forecast errors for each individual horizon) in the case of increased forecast horizons. The SUR estimator is applied to the forecast errors of the Bank of England, the US Survey of Professional Forecasters, and the FOMC.     

Steering the Sales Force for New Product Selling: Why Is it Different,and How Can Firms Motivate Different Sales Reps?

This study investigates how to direct and assemble the sales force for new product selling. In a first step, the authors draw on self‐determination theory to explore and empirically test a threefold conceptualization of motivation. Results provide insights into why sales force steering works differently in the new product selling context. Specifically, results show that for new products’ financial performance, internalized new product selling motivation is more important than intrinsic and controlled motivation. In a second step, the authors show how firms can motivate different sales reps to achieve higher financial performance of new products. In doing so, they examine the interaction effects of sales reps’ predispositions and widespread firm‐steering instruments on new products’ financial performance. Results reveal that the new product sales orientation of the bonus strengthens the positive relationship between sales reps’ performance predisposition and new product financial performance but weakens the relationship between sales reps’ learning predisposition and financial new product performance. Moreover, results reveal that the new product sales orientation of the periodic review strengthens the positive relationship between sales reps’ learning predisposition and financial new product performance. A post hoc analysis shows that a differentiated steering approach that matches appropriate steering instruments with sales reps’ varying predispositions substantially enhances reps’ financial new product performance.